RE: Can they even get 75% ...9 Jul 2019 12:38
The media is talking as if this is a chronically loss making company - yet it has made millions in profit the last 5 years. This year is just a blip. Their accounts show they sold just under £80m of goods for just under £200m - they are a fantastically profitable operation. They just let the wage bill grow too high to £40m. Go into Day's EWM and there is only 1 shop assistant, yet in Bonmarche there are 2! Clearly can easily halve the wage bill saving £20m overnight. Guidance is for £6m loss (of which £4m is depreciation so cash loss only £2m). So 20m minus 6m gives £14m profit and £18m cash profit. Valued at a mere PE of 7 on £14m profit makes it worth £100m or 200p a share. Why are board recommending Day's offer then of 11.4p?? Company has almost zero long term debt or pensions liabilities. It could easily issue £20m of bonds or pref shares to the market raising the cash it needs to get through a couple of tough trading years. Every company has had a couple of years of a downturn in business. With the hot weather all the Bonmarche stores are super busy now !!